The State of Xbox

The Power of X is looking a little dim

The past month for the Xbox brand has been a tough one. The CMA struck down their Activision-Blizzard acquisition. And now, after an entire hype cycle, Redfall comes out to flat reviews. This led to Phil Spencer conducting an interview with Kinda Funny Games’ Xcast podcast that clearly showed a very frustrated Phil with how things are going. Now, I highly suggest watching or listening to this interview, the Kinda Funny crew did a great job and Phil is very transparent and open about the issues that the brand faces. But since everyone is giving their opinion on the Xbox brand, I wanted to give my own and tell you why I wouldn’t push the panic button… yet.

So first really quick, I do want to make it known that Xbox is my second favorite brand of the “big three”. I have owned every generation of Xbox and have been with them through the highs and the lows. However, I have specifically been frustrated with the brand and console since the Xbox One was revealed. So, this isn’t coming from someone who is a blind fanboy for Xbox and PlayStation plastic box wars. So, with that out of the way, let’s get started.

So, I want to first defend Phil Spencer here for a bit. Phil is getting some calls to be on the chopping block because of a comment he made, in which he states “I see commentary, that if you just build great games everything would turn around. It’s just not true that if we go off and build great games, all of the sudden you’re going to see console shares shift in some dramatic way. We lost the worst generation to lose in the Xbox One generation when everybody built their digital library of games.” Phil is one hundred percent right about the Xbox One generation being the worst to lose. Microsoft came off the strong 360 era and lost players that may never come back. He is fully correct that generations don’t just start over anymore and even takes a small dig later in the interview at what I call plastic box wars elitist who still think we are in the 90s.

But I disagree with Phil that great games won’t help to get people to buy their brand. We are living in a world where more and more people own multiple consoles. There are many Switch owners who also own either a PS or Xbox console to make up for the mild AAA third party support on the Switch. And I’ve even seen it in my own personal life with casual gamers that I know, not just your hardcore gamer that wants to buy and play everything.

In regards to whether great games can shift markets, we have great evidence for this - the Nintendo Switch. The Switch helped Nintendo bounce back from a very dire situation the company had put themselves in. The Wii, as good as it was for them, was essentially a one hit wonder. With many of that audience going off to become mobile game players, they didn’t buy the horribly marketed and poorly thought-out Wii U, in the exact same generation where digital libraries became important. However, Nintendo released the Switch and now that system is the company’s second most successful hardware, even surpassing the Wii. How did Nintendo do this?

For starters, Nintendo smartly didn’t overreact and tried to make a console comparable to the competition. They came up with the hybrid concept (which has actually been a Nintendo fan’s dream for decades) and leaned into Nintendo’s games as the Disney of the industry. They pushed out great consequential games like The Legend of Zelda: Breath of the Wild and Super Mario Odyssey. The result is now over 120 million units and counting, and some of those are lapsed fans that haven’t owned a Nintendo console since even before the Wii. How do I know this? Well, I’ve seen it first-hand. I had a co-worker at my old job that was the biggest Xbox fan and told me he used to be a Nintendo fan but fell off after not liking the Wii concept. When the Switch came out, he saw Breath of the Wild and Mario Odyssey, and he was hooked. He bought a Switch and came in everyday telling me how happy he was to bring Nintendo back into his gaming life. This to me shows that while you aren’t going to sell consoles only because you bring out great games, its a big part of the solution.

There’s also another aspect to this many aren’t talking about. There is a whole generation of gamers out there that didn’t grow up with the Xbox brand at its peak. My nephew is in High School and recently started getting into gaming. I realized that he never saw Xbox at the peak that was the Xbox 360 era. Millions of younger gamers just know Xbox as the “wait till next year” brand. I am part of a growing smaller group that remembers those incredible days of the original Xbox and 360. And if Xbox wants to grow as a brand, they need to get those younger gamers.

As far as pressing the panic button? I don’t think they should. First, Microsoft still has an unbelievable number of studios that are all making what I hope to be great games and new exciting franchises. Second, Xbox from a revenue standpoint is doing pretty darn good. They still have the best value in gaming, Xbox Game Pass. And I do want to point out that every console tends to go through a rough patch, and this could just be the Xbox Series consoles going through theirs. But, if the Xbox Games Showcase coming up in a month fails to deliver AND Starfield comes out to middling reviews and performance issues, the microscope gets much bigger. If Xbox fans are then told the “wait till next year” wording again in 2024, the panic button must be pressed, and yes, even Phil Spencer’s position should be looked at.

If I’m Xbox, I put my head down and work. They got a great thing going with their ecosystem around PC, console, cloud, and Game Pass. I am a big-time believer in their strategy. Personally, I would drop the Activision acquisition and just focus on what you have. Let your talent do the speaking for you and get the games flowing. It’s time for Xbox to bring back that feeling from the 360 era. Don’t press the panic button… yet.